Platt Perspective on Business and Technology

Leading a nonprofit 17: when nonprofits merge 1

Posted in career development, job search and career development, nonprofits by Timothy Platt on January 6, 2013

This is my seventeenth installment in a series on leading a nonprofit (see my Guide to Effective Job Search and Career Development – 2, postings 267-282 for Parts 1-16.) And up to here I have focused on the single organization and its community context, and on leading and leadership in that overall context. I turn in this posting to consider a situation where everything that goes into determining leadership best practices for nonprofits, comes into sharp focus – when two nonprofits merge. Each has its own history and culture and traditions, and its own organizational mindset. Each has its own internal organization and staff, and its own leadership and its own operational and strategic processes and its own goals and priorities. Each has its own supportive and connected community. And now both seek to in some way join forces.

• This generally means the leadership, and in their executive suites and in their board rooms see a fundamental congruence and alignment of mission and vision pursued. But recognition of communality of overall and long-range goals and aspirations, while important here, cannot be enough to bring two functioning nonprofits to merge, in and of itself. On the face of it, matching mission and vision on their own would only serve to make them more direct competitors for the same discretionary income derived donor dollars.
• The leadership of these separate organizations have to also see critical gaps in what they can do and in their resources for action, that merging with this other nonprofit would correct. And these need to be gaps they could not simply address, at least with any real cost-effectiveness, strictly in-house and as a matter of ongoing strategically planned out growth within their own organizations.

In principle these conditions could arise and be recognized as highly significant for two nonprofits that are equivalent for organizational size, revenue generation, community reach and for other criteria that would enter this discussion. My own direct experience has been with much more asymmetrical mergers where a much larger nonprofit has in effect acquired a smaller though robustly effective nonprofit, with specific resources and community reach capabilities that the larger did not have, and could not otherwise realistically hope to achieve. I write this posting with a specific such merger firmly in mind with the larger nonprofit organized and operating in the United States and the smaller in Canada.

• Both held to essentially identical missions and visions. Their wording in their mission and vision statements differed, of course, but the basic core goals and priorities represented were essentially the same. If there were differences there, that would have had to be reconciled and I add here that is easiest where one of the two organizations (probably the larger) seeks to achieve everything in the other’s mission and vision, but with wider-ranging goals added in as well. Then this would not be a matter of one or both making fundamental changes in their core charter as to what they have stood for; this would be a matter of one or perhaps both simply expanding their charter and their overall goals to accommodate a compatible but wider mission and vision.
• The larger, US based organization had a much more comprehensive and a much more fully developed program and capability for addressing its needs and goals. And it had more than ten times as many local chapter offices, distributed nationally across its area of involvement than its Canadian counterpart, which was at that time limited to roughly half a dozen office locations spread relatively uniformly across the country east to west. Here, I add that some 90% of the Canadian population is located within 200 miles of their border with the United States so with a more tightly localized population a larger percentage of Canadians could be reached from a smaller number of office locations. But many people in the less densely populated regions of that country also needed help of a type this nonprofit sought to provide in meeting its mission and vision. So the Canadian organization wanted to expand its system and with added best practices vetted resources needed to make that possible.
• The United States based nonprofit had long-standing goals of reaching out into Canada, and perhaps eventually into Mexico as well, with that a very long term goal and of low priority through any realistic immediately foreseeable future. But they wanted to expand north into Canada now. They had an organizational and programs-based capability that was essentially linearly expandable if they were to make this jump in scale, with little need to change most of their internal operations, for example to meet new requirements. Or at least this was their understanding, where their basic assumption was that expanding north would be much like their already successful experience of expanding west and south throughout the United States. When current chapter offices became too large and cumbersome from increased local community reach and involvement, new chapters were split off and larger regions were split up and divided between old and established, and new and needed to keep them all leanly effective and without need for major reorganizational change in how chapter offices were structured and run. True, they did develop some explicitly identified “super-chapters” and particularly for serving large urban centers and their surroundings but they had grown for the most part along a single standard pattern. And they had moved into new territories within the United States, setting up new chapter offices in the same way, following established and vetted practices. But Canada was going to be different.
• The relationship between the United States and Canada has always been complex, with the two countries seeing each other as closest of friends and allies, but with each valuing their independent identities. And this has perhaps been more pressing for Canadians than for Americans, as Canadians have felt the pressure of American homogenizing influence, and politically and through television and other entertainment media and from business and economic pressure and more – Canadians have at times seen this as a challenge to their maintaining a true Canadian culture and identity. So any effective outreach by this United States-based nonprofit would have to have a very genuine Canadian face to it; it would have to be Canadian in spirit and fact. This smaller Canadian nonprofit was built upon a deep and fundamental foundation of Canadian community and as such, working with and even merging with it could open doors that would otherwise not be available for its American counterpart.
• Each of these organizations held sources of strength and value that the other needed and wanted and as a very high priority. These included fundamentally important elements that would have been very difficult if at all realistically possible, to independently develop strictly in-house as separate organizations. And their core similarities made their joining a very attractive possibility.

And this brings me to consider their leadership and what it takes for two nonprofits to see both need and opportunity where a merger might make sense, and challenge and incompatibility that might have to be addressed in even a most successful merger. I was initially planning on covering this topic in one posting (this) but I will pick up on this start in a next installment where I will address issues of leadership and of establishing buy-in, and both within these organizations and for their supporting outside communities. Meanwhile, you can find this and related postings at my Guide to Effective Job Search and Career Development – 2. I have also posted extensively on jobs and careers-related topics in my first Guide directory page on Job Search and Career Development. You can also find this and related postings at Nonprofits and Social Networking.

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